Posted
by
samzenpus
on Monday August 27, 2012 @02:50PM
from the road-less-traveled dept.

nmpost writes in with a story about how hard it is to be a successful PC company in today's world. "Hewlett-Packard Co. used to be known as a place where innovative thinkers flocked to work on great ideas that opened new frontiers in technology. These days, HP is looking behind the times. Coming off a five-year stretch of miscalculations, HP is in such desperate need of a reboot that many investors have written off its chances of a comeback. Consider this: Since Apple Inc. shifted the direction of computing with the release of the iPhone in June 2007, HP's market value has plunged by 60 percent to $35 billion. During that time, HP has spent more than $40 billion on dozens of acquisitions that have largely turned out to be duds so far. HP might have been unchallenged for the ignominious title as technology's most troubled company if not for one its biggest rivals, Dell Inc. Like HP, Dell missed the trends that have turned selling PCs into one of technology's least profitable and slowest growing niches. As a result, Dell's market value has also plummeted by 60 percent, to about $20 billion, since the iPhone's release."

"PC Makers"? Ha. They're middle men. Integetrators of other people's products. They "make" nothing. It was inevitable that they would get squeezed out until the last man that can survive on the smallest margin is left standing. All the ultrabooks and "surface"s in the world won't change the fact that Windows computers are a commodity and always will be until MS tells the OEMs to take a hike and put them all out of business.

Of course they did this, they outsourced their soul when they thought their companies were nothing but machines with parts that could be replaced with parts from the cheapest provider. Once they did that they lost their soul and they lost their innovation. Nobody had a desire to take pride in their company anymore knowing that they could well be the next to replaced with someone in India next.

It was the rank and file of the old HP, Dell, Compaq etc that were so damn innovative that built the industry. Upper management came along and thought they could outsource them and still get the same results, failing to see how people would no longer/care/. People who are focused on surviving simply don't give a damn and the next thing you know companies like Acer and Samsung rise from being providers to the giants to the next giants themselves.

Here's the thing, if they do the same thing the American companies did, they too will fall and someone else will take their place. Seriously, can anyone ever give me a single example of where outsourcing actually worked out in the long term for someone other than the vendor?

Both Dell [yahoo.com] and HP [yahoo.com] are making billions. They mostly cater to the business sector. I mean sure Apple [yahoo.com] has a 25% profit margin, which is insanely high for a hardware company. Most of that is from iPhone and iPad, and those items come and go based on the whims of consumer taste. 10 years, 20 years is a long time in the computer industry; companies rise and fall during those times. Anything can happen. 15 years ago, Apple was nearly bankrupt, and now they're the most valuable company by market cap. IBM was taking massive losses nearly 20 years ago, now they're the 3rd largest tech company. In the meantime, Compaq is gone, DEC is gone, Wang is gone, etc. HP and Dell have been reinventing themselves, and they're closer to what IBM looks like rather than Apple.

It's only dying as a consumer appliance. Professionals and power users will always need a powerful general-purpose computer with a real input device (a.k.a. keyboard) and a screen bigger than 10 inches.

It's funny to see how many tech companies are being sunk by the MBA bloat. Dell, HP, Microsoft, Micron, it's really kind of sickening. One of the single dumbest human beings I've ever met had an MBA and I don't think he was an aberration.

In part, this is what the Apple/Samsung lawsuit is about. If you follow the "Innovator's Dilemma" arguments, the PC makers, and now a lot of the Android makers (tablets and phones) are competing solely on price, because the innovation to get any other advantage has already occurred.

Certainly Apple has invested a lot in product development for iPhone, iPad, iOS, etc. Whether these things should be patentable in the first place, should be separated from whether enforcing the patents, "trade dress", etc results in more or less innovation.

The question for HP in particular, is whether they can innovate on top of (a) Microsoft licensed technologies, (b) Android licensed technologies, or (c) invest time and energies in doing something original. (c) is definitely a gamble, but it's not clear that HP can ever grow out of the bottom by following either (a) or (b).

(Replying to Original Commenter's comment): Yeah, HP sucks, but so does Dell and Acer and Gateway and everyone else who makes PCs.

(Replying to both comments, but mostly AC's): I think you over estimate the demise of the PC and also don't understand what they are used for in Enterprise. I agree that, in general, the PC business is declining. I think that will result in a lot of consolidation, likely into segments where the consumer PC business will consist entirely of low end PCs and the enterprise business will consist mostly of high end servers. And HP's bread and butter is in the Enterprise, so I suspect that a company like Acer or Dell will end up "owning" that business and HP will "own" the Enterprise business. Everyone else will go out of business.

Speaking of enterprise, there are a LOT of applications running on PCs in the enterprise. Salespeople run client / contact management software, account managers run portfolio analysis software, HR runs tons of HR-related apps, there's a myriad of software running on desktops in the enterprise and upgrades are required all the time. I don't see PeopleSoft being replaced by an iPhone app anytime soon.

The PC market is in decline, but it is not dying and will not die in the near future. The main reason for sluggish PC sales is that the technology has reached a peak at the moment (or you might say it has finally matured) and consumers no longer need to buy a new system every couple of years just to keep up. Since the dawn of the PC era users have had to constantly upgrade their hardware to run that new OS, that new game, or that new multimedia application. That time has ended. A decent system bought 5 years ago will still run everything it needs to.

True, the rise of tablets and smartphones also gnaw at the PC market, because some people only want to check their email and log onto Facebook, but the power, flexibility and usability of the PC will remain indispensable for a large amount of users and professionals.

I was at Lucent when Carly was there - I thought she was a waste of space then, and I was shocked when HP hired her. HP was "Bill and Dave's company" - by and for engineers making great products. It was obvious to this outsider Carly was the wrong choice - I had no idea how right I was. A friend in HP Sales confirmed there was dancing in the hallways the day the HP board finally canned Carly. The only good part of HP that is left isn't HP at all - Agilent Technologies is as close as we have to what Bill and Dave started.

Stop that. Please, I beg of you. Stop saying PC dying. I have yet to see a tablet that can handle the Autocad/Mastercam/Catia drawings that we work with. I don't want to be stuck having to build this shit from scratch, or purchase a server just so people can use the software they have to use every day.

Before you all go off on 'virtual server/blahblah' I'm telling you, we have tried, and nothing beats having each user have a PC at their desk using the software to do their work. Just because we can make the PC last 5 years before having to replace it, doesn't mean that the PC is dying.

iBUYPOWER and other similar, smaller companies have something in common that Dell, HP, et al do not have: they're small and nimble, and they specialize. They do one thing, and they do it well. Even if HP/Dell/etc. have departments or divisions which specialize, they can't compete because of the corporate overhead. See: Alienware's ultimate mediocre standing.

I'm sure a big part of the reason why they're not doing well is because people don't buy as many PCs anymore, but people do still have PCs (and laptops). They're more resilient and last longer now than they did a decade ago, and that's another part of it. I don't think the 'iPhone craze' has much to do with it, that's a misnomer.

The fact is that any successful product company (or industry) will become a commodity unless they are seen by the public at large as adding value to whatever they integrate. Don't kid yourself - everyone's an integrator to one degree or another, even Intel, Nvidia, and AMD. They're just integrating at a different level - and adding value.

With Intel, nvidia, and AMD all providing largely/fully integrated systems out the door (via integrated chipsets and GPUs), and most people 'just' wanting things like email, web browsing, and maybe some video playback and light gaming, there's nothing to distinguish the companies which put those devices in a box and label it with their brand when none of them bother to be anything but acceptable (or universally horrible - I don't know, I've not bought any of their stuff for home use for years), and few aesthetically distinguishing factors between them, why care?

Apple's products may not be that different than HPs and Dells, but they at least market their shit^Wproducts well. They have a frenzy of marketing every 3 or so years (or whatever it is now) when a new product is due, and they provide their customers with a very narrow set of products to pick from (something like two configuration options per line?). Then they provide good support (so I've heard is the perception), which is entirely unheard of pretty much anywhere, anymore, in an industry where "good support" hasn't been seen for a decade.

You can't rest on your laurels and think you can keep making the same profits you used to in the "beige box" era of PCs.

The problem is, I wish they would stick more to boring commodity PCs. Instead they pre-load it with utterly useless software.

The amount of sheer crap they install on PCs now is maddening. On both my wife's HP laptop, and her mom's Toshiba, I had to go in and disable/uninstall of those stupid *$^%!@ extra "assistant" pieces of crap. They don't do anything except hog up the CPU and memory, and mostly amount to something which says "I see you are using a computer, would you like us to optimize that for you".

I wouldn't buy a PC from any of the manufacturers which install any of this shit. Give me a vanilla install of Windows, and leave me the hell alone. I don't want your wizard, agent, helper, toolbar, or any other of this crap. It doesn't help, and it effectively downgrades my machines as it's using all of the memory and much of the CPU.

The problem with these companies is they think they can make something better to brand the OS, and they end up selling a shitty machine with a crappy user experience. Stay out of there, you're clearly not qualified for this.

And, from what I've seen of my wife's personal and work laptops... well, HP sells low end hardware at a high-end price. I would personally not buy from them again. Give me a boring old beige box PC from a local system builder any day that has quality parts in it -- I can always put some "Type R" stickers on the case later if I feel it needs a little something extra.;-)

I don't think that normal people have been brainwashed, I think that they never needed a general purpose computer in the first place. They kept on having problems with their general purpose computers, and Apple has been able to make most of those problems go away for most people. The market rewards that kind of behavior.

My experience is that those who went back later in life for an MBA actually understand how to use the education. The problem is, they're going back because they have to get the degree to be competitive. It's become a gatekeeper degree: no MBA, no interview. It has value, but not in the way that it's so commonly being used.

Also, are you under the impression that tablets/phones wont be able to dock up to a real 'workstation' with a screen that is > 10 inches???

Sure they will. And what you'll get is an expensive, absurdly underpowered, restrictive computer that specialises in running the kind of software you get if you spend $2 in an app store.

The current generation of mobile devices is doing very well because they serve a vast and previously bizarrely undersupported market: people who want a portable device for easy information consumption. If you're not doing any sort of content creation, significant computation, or catering to more than one user at once, you can get by with the kind of processing power you find in an iPad or a Galaxy S3. If you're not expecting much in the way of interaction, you can get by with a touchscreen and very simple user interface concepts. For the market where they are wildly successful, the current crop of smartphones and tablets are excellent devices, balancing low power consumption, ease of use, portability, and "wow factor" against a bunch of downsides that their users simply don't care about.

On the other hand, as soon as you do need to do anything creative, or do any real computation, or scale up to multiple users, or support non-trivial interactions, the current crop of mobile devices suck. All those downsides that didn't matter before are now dominant, and the high price, low power and almost zero flexibility are fatal liabilities. And no matter how much window dressing you lay out, they always will be, because it's not the job these devices were designed for.

Well if they're middle men then why aren't you assembling your own motherboards and graphics cards from capacitors, resistors, crystals and chips. No, better yet, do it with sand and raw metal and plastic. No, better yet, dig up your own beach, drill your own oil well, and mine your own ore... The world is full of middle men. They have a function.

Go to the airport. Look at an airplane. Now look at your tablet. Now back at me. Now back at your tablet. Sadly, you can't read the specifications and dimensions listed on the blueprint for that airplane on that tiny ass screen. Look at the Internet, and now back at me. Your ISP has blocked retrieving that file from the iCloud because it's "too large/over bandwidth limit/insert other MPAA/RIAA restriction".

I'm telling you. Schools need to haul kids out to the field again. Let them get a real sense of what the rest of the working world has to deal with before they are allowed to make any decisions.

Luddites obviously don't want a PC anymore, and I don't disagree with them. When a tablet or smartphone gives them all the functionality they required, such as the ability to tweet, change their Facebook status, and play Angry Birds, then there is no reason for the average consumer to require a PC today. So all those claiming the PC is dead, long live the phone/tablet, your voices have been heard a million-fold.

PC (or Mac) is still a very much required product for content CREATORS, you know, those people that make Facebook, Twitter and Angry Birds. You can't make apps on the iPad or iPhone, you can't make apps on an Android phone or tablet, and can't create app on a Windows Phone.

I think the PC market IS being rebooted, in the form factor of a hybrid tablet. While Luddites will need nothing more then a Windows RT tablet, the rest of us that develop and create content could easily see the old PC shoebox form factor being replaced by a Windows Pro tablet. Honestly the spec's of the Surface Pro exceed what I use for work to develop on and I am sure that there will emerge a new generation of Pro tablets with i7's and all kinds of fast multi-core CPU's and gobs or RAM that will essentially replace shoebox and laptop computers. As much as Apple has laughed at a tablet/PC hybrid, I think Apple is very scared of a market of competitive devices where content can both be consumed AND generated. A device that allows "enterprise" to easily gravitate towards a new tablet form factor running Windows is Apple's biggest nightmare, and its about to come true in a few months.

So, I won't rule Dell and HP out of the game yet, but if those companies are not ready to release a Windows 8 Tablet (both Luddite loving and Geek loving variants). then you should rule them out for being willfully stupid to recognize and adapt to market trends.

For me, a PC is anything that can be used to develop content on. While the average consumer needs nothing more then a device that beeps when it receives a tweet and some sadistic joke of an on-screen keyboard, there is still a large and strong market of people needing a product that can MAKE content.

I can create and use my own Debian repository with little more than a text editor.

THAT is what an open tool set allows for.

I don't have to be a Fortune 500 company. I don't have to be a University. I don't have to be a developer. I don't have to have a PhD. I don't have to own another computer dedicated to the walled garden.

Thus the "power users helping the rest of us" thing that you can have in the Ubuntu community that doesn't and really can't exist in Apple's payola nirvana.

Apple provides PC desktops/laptops too, which allow you to do anything you like. They will continue to do so.

...and if you accept Jesus as your Lord and Savior, your life will improve.

What will probably happen is that by 2015, Apple will have locked down all of their systems. User-programmable computers will be available from Apple at astoundingly high cost (because they will only be high end workstations) and should the user distribute a program Apple disapproves of, their license to use Apple's OS will be revoked and the OS will be remotely deactivated. Apple's product strategy is about control; what makes you think they will continue to make user-controlled computers once they have phased in a system to retain such control?

In fact even on mobile platforms Apple does not eliminate choice, they could shut down jailbreaking if they really wanted (or make it way harder than it is) - they choose not to.

If they were uninterested in that option, why did they make jailbreaking harder than plugging the phone into a computer and entering some commands in a terminal? Companies do not typically patent techniques of doing things they consider to be out of the question.

Before Apple introduced the "App Stores" to the world at large (and I know there were plenty around before, just not as widely known) the users only had a choice of what was basically a wide-open system where apps just came from anywhere.

No, before Apple introduced the "App Store," you had these:

Timesharing computation utilities, that allowed users to rent time on a computer to run whatever software the utility did not ban.

Video game systems that would only run programs that had been digitally signed by the manufacturer.

Cable and satellite TV receivers that were designed to only run manufacturer-approved firmware.

Word processor computers that could perform a few pre-installed tasks.

Thousands of other computers that people have come to depend on, but which are designed to thwart any sort of hacking, modification, programming, etc.

Apple just saw this sort of thing and said, "Well if it works for mainframes, video game consoles, and printer catridges, we can make it work for tablet computers (and maybe even laptops)!" The user's choices are now "curated" by Apple, just like their choices were previous "curated" by Nintendo, IBM, or Xerox.

Lots of freedom, but too much freedom for a non-technical user to handle easily - hence a world of viruses and malware that arose as a result.

Yet despite that problem, it was also a world that had governments terrified of their citizens, a world which exposed scientology, a world that made Wikileaks possible, a world that allows Chinese and Iranian citizens to read banned material, a world that resulted in one new innovation after another. Once you start telling people that they cannot run unapproved software, you wind up here:

This is not about choice or about security, it is about freedom -- freedom is inconvenient, which IBM knew in the 70s when Apple was actually giving people freedom. If Apple had any interest in respecting its users' freedom, they would have made a standardized, not-hard-for-technical-users method of removing the restrictions. Apple has become the new IBM: they want to make money on computation, and they have lost whatever respect they might have had for the users of their systems.

Well, sure, I'm capable of compiling one of my projects on a single core 400Mhz CPU, with 256MB of RAM, but takes 25 minutes. On my quad core desktop, it takes 5-8 seconds, in the process kicking up 15GB of RAM-dust.

There's a reason why pressing alt-tab works: It enables me to switch from one screen to another without having to refocus my eyes. Which means that when I'm comparing documentation to my code, I can instantly see implementation and reference, with minimum eye movement.

Try doing the same on a tablet where I have to double click a central button, then find the icon of the app, move my hand to click the button, then re-position my hands on the keyboard, and finally try and find the area of the screen I was focused on.

By the same logic you're applying, anyone currently walking around with an iPod should just walk around with a discman and a bunch of CDs, on the go. The sound quality is the same, and you can buy batteries anywhere. If you're an iPhone user, stop being so pretentious and just use payphones.

Maybe your usage fits a tablet, but please, I'm fine with paying premium prices to keep my hands on a real keyboard, attached to a real computer. I'm not telling you "you're wrong" for being fine with paying premium for a glorified iPod, so please, do return the courtesy. It's this kind of bullshit PHB-wannabe[1] arguments that have provided us with the abortions that are unity, gnome3, metro and the app store.

[1]: "I don't understand what I'm talking about, yet I'll talk out of my ass just to seem knowledgeable." Your boss is probably like this, which is fine; we're there to manage our bosses.

Actually it was because they were using Intel kickbacks to win the price wars.

The problem they found once the price wars were over was that both Intel and AMD in their race to outdo each other went right past "good enough" and straight into "insanely overpowered" for everyone except the top 6% or so of heavy PC power users and there just aren't enough of them to sustain a market.

The OEMs and MSFT got spoiled by the crazy turnover rate of the MHz wars, simple as that. Until the rise of multicores it was practically pointless to even try to upgrade your PC as changes were coming so fast and speeds were jumping so quickly that a 2 year old PC would be struggling badly to run the latest software, much less play games or do any other heavy lifting. In one 5 year period I went from a 300MHz to a 2200MHz and my RAM went from 64Mb to 2Gb...those are pretty damned big jumps folks. There wouldn't have even been a point in trying to stretch the life of those machines a little longer because they were so quickly outclassed.

Now compare that to the PCs I was selling 5 years ago, which were Phenom I X3s and X4s along with Intel Core Duos...is there anything your average office worker or home user does that wouldn't run just fine on a Phenom X3? Hell I have an engineer friend running Solidworks on a Phenom X3 and is quite happy with it. The machines I built 4 and 5 years ago can be easily and simply upgraded with just a RAM stick and the multicores will happily do any job they have with cycles left over. Hell if you wanted to game you were looking at a full PC changeout every 2 years, now I'm happily playing on a Phenom II X6 and the only reason i bothered upgrading from the quad was it was on sale and let me give the quad to my youngest who is happily gaming on it this very minute according to Steam.

The bullshit the press is spewing of "Tablets are gonna replace the desktop ZOMFG! Look at the numbers ZOMFG!" is a classic example of "correlation doesn't equal causation" because as someone in the trenches I can tell you PCs aren't going away, in fact most folks have never owned so many PCs...and that is the problem the OEMs have. There hasn't been a "killer app" to require a major upgrade, hell even gaming works great on a 4 year old C2D or Phenom II X3, so people are simply keeping what they got because they are so overpowered. Hell my EEE netbook cost like $350 over a year ago and the thing plays L4D and many other mainstream games just fine...on a $350 netbook!

So the OEMs are either gonna have to accept its a mature market, where like dishwashers people don't replace until they fail, or they are gonna have to make new markets to sell to. I personally have been making good money selling Mini-HTPCs. People like being able to have a box that has all their music and movies, can stream it to anywhere they are in the house, or they can watch them hassle free on their widescreen TV with one of those Lenovo keyboard mini remotes.

But as long as they think they can just slap the latest chip in a box or laptop and it'll magically sell of the shelves they are gonna be hurting, because the average user is not gonna see the websites load any faster on the latest monster than they are that first gen Core Duo, nor are their office programs, their video games, or anything else they use gonna run with enough of a difference in speed to justify spending all that money and going through all the hassle of transferring their stuff. The tablet? They use that as an eBook reader and to look up on IMDB what the name of the actor is in the show they are watching, different use case.

Or that Dell loaded 2nd rate computers up with bloatware and dumped what used to be Awesome support. Yes that used to be awesome with a capital A. Now they run neck and neck with Best Buy for customer horror stories.

I am the tech guy for my large family. I am totally sick of them buying various computers, dell, HP, acer, or whatnot and my being expected to pull their asses out of the fire when the bloated pile of crap blows up. I am one inch from throwing them across the room when I go to hit shift and keep hitting the stupid \| button that makes up half of the shift key on most crap computers these days. Then it takes hours to remove all the norton AV trials and whatnot. If I try to wipe the OS it is near impossible to find a matching version of Windows OS that will match their product key. Basically I haven't used windows much since XP so I hate supporting vista and windows 7, I suspect that I will just shrug when presented with a windows 8 problem. I'll just fearmonger them with suggestions that windows 8 is spying on them.

For all the complaints I have about mac (Cost being #1) there is no bloatware and with a timecapsule set up, restores, and upgrades are brain dead. Worst support issue I've had with a mac in a long time was iCloud being a royal pain in the ass.

In a few cases I have managed to get them over to a good desktop running Linux and the support issues have been completely limited to printer drivers. I suspect that some of these machines might still be running 8 years from now.

What I don't understand is why there isn't somebody trying to sell me a good Raspberry Pi: Say 1.5Ghz dual core, 2-4G ram, 16G SSD, OK video (enough for HD Youtube), and wireless. Say $99. A tiny little box that looks like a USB hub. I would leave a trail of those in family houses. That computer would take the world by storm. If the SSD was removable then for support all I would need is the SD card.

It's called outsourcing, contracting out all the work to cheap off shore manufacturers called, ODMs, Other Device Manufacturers. These euphemistically defined companies actually made the computers right down to the badges of other companies names on those computers. The greed of psychopathic corporate executives to earn greater bonuses by reducing current cost regardless of the inevitably consequences. Those consequences being the creation of a whole series of new companies with the skill set of the actual manufacturing and distribution of computers for whom the 'Name Brands" other nothing other than a profit consuming overhead. Companies like ASUS and ACER and even Samsung.

Basically the ODM's ahve matured and are actively working to cut out the profit consuming middle man. Things are only going to get much worse for the 'Name Brands' as a bunch of companies out of China start looking to go direct. Why should they take pennies when companies like Apple cream the dollars, it is inevitable the price squeeze will happen and the badge companies will all die unless the start buying up the the future competing direct selling manufacturers they created.

That sounds all well and good, and I'll agree that those other domains are certainly legitimate domains of knowledge which can be very interesting in their own right. However, if people who are genuinely stupid are getting MBA degrees, something's wrong. Just like you should be able to earn a degree in theoretical physics if you're a moron, you shouldn't be able to get a Master's degree in anything, at least from an accredited school. University degrees are supposed to show not only that you showed up for class, but that you understand material that is at least somewhat difficult to grasp (or else why would you need to go to a University to learn it, instead of just picking up a pamphlet?). If this many morons are getting these degrees, it shows there's something wrong with the places handing them out, and it makes the degree look worthless for everyone.

Apple's parts are identical to those of a PC, Apple is only another integrator just like Dell, HP et al when it comes to actual computers. Even the iphone is just a set of commodity parts purchased and soldered together in a nice wrapping.